What you need to know
Security Investments – Bank Bills
Product Information Document*
Issue date: 14 September 2010
Issued by:
Commonwealth Bank of Australia ABN 48 123 123 124
AFSL 234945
You should read all sections of this Product Information Document
before making a decision to acquire this financial product.
As the information in this document has been prepared without considering
your objectives, financial situation or needs, you should, before acting on
the information, consider its appropriateness to your circumstances.
*Please note that this product is not regulated under the
Corporations Act 2001.
Contents
General Information2
Features at a glance
2
Purpose of a Product Information Document (PID)
3
What are Security Investments – Bank Bills?
3
What is a prime bank?
4
Who are Bank Bills suitable for?
4
How are interest rates determined?
4
How does a Bank Bill work?
4
Repurchasing a Bank Bill
5
What are the significant benefits of a Bank Bill?
6
What are the significant disadvantages
of a Bank Bill?
6
What are the significant risks?
7
How do I invest in a Bank Bill?
7
How do I set up an account operating authority?
7
Severance8
What are the costs involved in a Bank Bill?
8
Are there any tax implications
I should be aware of?
8
What if I have a complaint?
8
Customer information and privacy
9
Definitions11
APPENDIX A – Fees and Government taxes
12
1
General Information
Features at a glance
Significant benefits
Security of a fixed interest rate.
Significant risksYou may receive back less than your purchase price if you request
the Bank to repurchase your investment. You may be exposed
to another bank’s credit risk if your Bank Bill is not accepted or
endorsed by the Commonwealth Bank of Australia.
Minimum investment amount$100,000.00.
Terms availableFrom 1 day to 185 days.
Interest ratesCurrent interest rates are available on request from your relationship
manager or any branch of the Bank.
Payment of earningsAt maturity.
Fees and chargesNo Bank fees or charges are applicable. For further information see
Appendix A.
Withdrawals in advance of maturityAt the discretion of the Bank. May be repurchased partially or in full,
subject to certain conditions.
Repurchase priceA repurchase price will be calculated by reference to the
repurchase amount, the remaining term of the investment and
the repurchase rate.
The information in this Product Information Document (PID) is subject to change from time to time and is up to
date as at the date stated on the cover. Where the new information is materially adverse information, the Bank
will either issue a new PID or a supplementary PID setting out the updated information. Where the new
information is not materially adverse information, we will not issue a new PID or supplementary PID to you, but
you will be able to find the updated information on our web site commbank.com.au or you can call 13 2221. If
you ask us to, we will send you a paper copy of the information.
2 GENERAL INFORMATION
Purpose of a Product Information
Document (PID)*
What are Security
Investments – Bank Bills?
A PID aims to provide you with enough information
to help you decide whether the product will meet your
needs. It also helps you to compare the product with
others you may be considering.
A Security Investment – Bank Bill (Bank Bill) is a short
term investment in an underlying security being either
a bank accepted or bank endorsed bill of exchange
(as explained below) where the term of the security
is for a period of 185 days or less. The interest rate
applicable on the Bank Bill is determined on the deal
date by reference to prevailing market interest rates
and is fixed for the term of the investment.
This PID provides information about a product called
a Security Investment – Bank Bill (Bank Bill). If you
decide to invest in a Bank Bill, you should keep this
PID and all other documentation relating to your Bank
Bill for future reference.
If you have any questions or wish to contact us call
13 2221 between 8am and 8pm, Monday to Friday,
visit our web site at commbank.com.au, or call into
any branch of the Commonwealth Bank of Australia
(the Bank).
To assist you in understanding this PID, the definition
of some words is provided in the “Definitions” section
on page 11. When used in this PID, these words
usually appear in italics.
Bank accepted bill
A bank accepted bill is a bill of exchange that has
been accepted by a bank. This means that the
accepting bank is obliged to pay the face value of
the bill to you on the maturity date. For a Bank Bill,
the Bank will only sell you bank accepted bills that
have been accepted by a prime bank.
Bank endorsed bill
A bank endorsed bill is a bill of exchange that
has been endorsed by a bank. This means that
the endorsing bank is obliged to pay the face value
of the bill at maturity to you should the acceptor or
drawer of the bill be unable to do so. For a Bank
Bill, the Bank will only sell you bank endorsed bills
that have been endorsed by a prime bank.
Bank bills are discount securities, meaning they are
issued and on-sold to investors at a discount to their
face value. Refer to the “How does a Bank Bill work?”
section in this PID for more information on how this
product works.
*P
lease note this product is not regulated under the Corporations
Act 2001. As a result you should understand that access to certain
remedies under the Corporations Act 2001 may not be available.
3
How are interest rates
determined?
What is a prime bank?
According to the Australian Financial Markets
Association (AFMA), to be considered a prime bank,
a bank must:
nbe
an Australian Prudential Regulation Authority
(APRA) Authorised Deposit-Taking Institution and
classified by APRA as: an “Australian-owned Bank”;
a “Foreign Subsidiary Bank”; or a “Branch of a
Foreign Bank” that is authorised to carry on
banking business pursuant to the Banking Act
1959 (as amended) or “comparable legislation in
its country of origin”; and
nbe
rated by Standard & Poor’s as having a short
term rating of A1+ and a long term rating of at
least AA-.
It is also expected that its acceptances or negotiable
certificates of deposit trade at the lowest benchmark
yield, as determined by the market.
The lowest benchmark yield, for a given term, is
determined with regard to the credit quality and
liquidity of the underlying bank.
The rate of interest is based on the prevailing market
interest rate. The market interest rate is adjusted by
a margin that reflects the following factors:
nan
allowance for the Bank’s business costs, both
fixed and variable;
nthe
Bank’s profit margin; and
nrisks
(if any) associated with the product.
The margin may vary from time to time due to changed
market conditions, the relative liquidity of the bank bill
market, and the timing of the transaction.
Details of current interest rates are available on
request from your relationship manager or any
branch of the Bank.
How does a Bank Bill work?
On the deal date
On the deal date, you agree with the Bank the term
and either the face value or the purchase price of
your investment as well as the interest rate that will
be applied to your Bank Bill.
A listing of prime banks is accessible via the AFMA
web site www.afma.com.au or upon request from
your relationship manager or any branch of the Bank.
The Bank then applies the following formulae to
calculate either the purchase price or the face value
of your Bank Bill. The purchase price is payable by
you on the deal date.
Banks that are not defined as a prime bank under the
AFMA definition will be classified as non-prime banks
for the purposes of this PID.
If you nominate a specific face value, the purchase
price is calculated as follows:
Who are Bank Bills suitable for?
Situations in which Bank Bills may be
appropriate are:
nyou
have $100,000.00 or more to invest;
nyou
are seeking an investment for a term of
185 days or less;
If you nominate a specific purchase price, the face
value is calculated as follows:
nyou
are seeking a return that is referenced to
prevailing market interest rates; or
nyou
believe that market interest rates will remain
steady or fall in the near term.
4 GENERAL INFORMATION
Shortly after the deal date of your investment, the
Bank will send you a confirmation letter disclosing the
security type, the interest rate, face value and term of
the investment.
You should retain the confirmation letter for tax
purposes as the Bank will not send you an end
of year summary of earnings.
receive the face value of $200,000.00 and your
investment earnings will be $2,194.82
(i.e. $200,000.00 - $197,805.18 = $2,194.82).
You may choose to link your Bank Bill to a Cash
Deposit Account (CDA) with the Bank. Refer to
the CDA Terms and Conditions for more information.
This document is available at commbank.com.au, or
upon request from your relationship manager or from
any branch of the Bank.
* Examples are used for illustrative purposes only.
The Bank will hold your Bank Bill free of charge on
a safe custody basis.
Example 2*
You have $150,000.00 and wish to purchase a Bank
Bill with a purchase price of $150,000.00 for a term
of 90 days. The Bank quotes to you an interest rate
of 4.50% per annum, which you accept. Your face
value is calculated as follows:
On the maturity date
On the maturity date, given the accepting or endorsing
bank meets its obligation to pay the face value, the
Bank will pay to you the face value of the investment.
The difference between the purchase price and the
face value is the earnings on your investment.
Prior to the maturity date, you may contact the Bank
with your instructions for the maturing Bank Bill.
You may choose to invest in another Bank Bill or
request the face value (proceeds) to be paid into your
nominated bank account on the maturity date.
If, on the maturity date, the Bank has not received
instructions from you, we will:
nautomatically
reinvest the proceeds into a Bank Bill
for a similar term at the prevailing interest rate on
that day; or
nwhere
the Bank Bill is linked to a CDA, we will
pay the proceeds from your Bank Bill into an
At Call Deposit within that CDA at the prevailing
interest rate.
If the proceeds are reinvested into a Bank Bill, the interest
rate applicable to the new Bank Bill may be different
from the interest rate applied in the previous term.
The following examples illustrate the way the
purchase price or face value of a Bank Bill
is calculated.
Example 1*
You wish to purchase a Bank Bill with a face value
of $200,000.00 for a term of 90 days. The Bank
quotes to you an interest rate of 4.50% per annum,
which you accept. Your purchase price is calculated
as follows:
On the deal date, you pay the purchase price
of $150,000.00. On the maturity date, you will
receive the face value of $151,664.38 and
your investment earnings will be $1,664.38
(i.e. $151,664.38 - $150,000.00 = $1,664.38).
* Examples are used for illustrative purposes only.
Repurchasing a Bank Bill
Requests for a repurchase are to be submitted to
your relationship manager or any branch of the Bank.
Requests for a repurchase are at the discretion of
the Bank.
Repurchases can be for a partial amount (partial
repurchase) or the full amount (full repurchase) of
your investment.
For a partial repurchase, the minimum repurchase
amount is a face value of $25,000.00, and a residual
balance of a minimum face value of $50,000.00 must
be maintained. The residual component of your Bank
Bill will continue to earn the original interest rate.
For a repurchase, the Bank will calculate a
repurchase price payable to you. The repurchase
price will be calculated using a repurchase rate,
which has been determined by the Bank acting
reasonably based on the following factors:
n
face
value to be repurchased;
nprevailing
market interest rates on the
repurchase date;
nremaining
term to maturity;
nthe
cost incurred by the Bank to settle
your repurchase; and
nthe
On the deal date, you pay the purchase price
of $197,805.18. On the maturity date, you will
status of the accepting or endorsing bank on
the repurchase date (i.e. whether they are defined
as a prime bank or a non-prime bank).
5
What are the significant benefits
of a Bank Bill?
The repurchase price is calculated as follows:
Benefits include:
n your
interest rate is set by reference to prevailing
market interest rates and is fixed for the term of
your investment;
n a
wide range of terms are available ranging from
1 day to 185 days;
n no
Depending on the factors mentioned above, on the
repurchase date you may receive a repurchase price
that is:
n
equal to your purchase price; or
n
less than your purchase price; or
n
more than your purchase price.
The Bank will notify you verbally of the repurchase
price as soon as practicable after making this
calculation. If you accept the repurchase price, the
Bank will then send you a letter confirming the details
of your repurchase.
Example 3*
Following on from Example 1, you originally
purchased a 90 day Bank Bill with a face value of
$200,000.00 at an interest rate of 4.50% per annum.
The purchase price was $197,805.18.
You request the Bank to repurchase your investment
in full with 30 days remaining until the maturity date
and the Bank agrees to your request.
Market interest rates have risen since the deal date
and the Bank calculates a repurchase rate of 5.10%
per annum.
The repurchase price is calculated as follows:
On the deal date, you paid $197,805.18 for
the investment. On the repurchase date, you
receive $199,165.14, therefore your earnings
on the Bank Bill will be $1,359.96
(i.e. $199,165.14 - $197,805.18 = $1,359.96).
* Examples are used for illustrative purposes only. The actual repurchase
price of your repurchase will depend on prevailing market interest rates
on the repurchase date. Although in this example your earnings are
positive, your earnings could be negative depending on interest rate
movements. In the event of a repurchase, the actual rate of return on
your investment is impacted by the repurchase rate and the period
for which the Bank Bill was held and may vary from your original
expected rate of return.
6 GENERAL INFORMATION
transaction or account keeping fees are
applicable (refer to Appendix A for more
information);
n the
Bank will hold your Bank Bill on a safe custody
basis free of charge; and
n you
are protected against falling interest rates
during the term of your investment.
What are the significant
disadvantages of a Bank Bill?
Disadvantages include:
n you
may not be able to invest to the exact maturity
date that you require as terms are subject to the
availability of bank bills on issue;
n you
cannot benefit from increases in market interest
rates that may occur during the term of the Bank
Bill as your interest rate is fixed for the term;
n requests
to the Bank for a repurchase are subject
to the Bank’s discretion; and
n in
the event of a repurchase, you may receive
back less than your purchase price (refer to
the “Repurchasing a Bank Bill” section for
more information).
What are the significant risks?
Interest rate markets may be volatile. Investments in
these markets may involve actual losses if you request
the Bank to repurchase the Bank Bill prior to maturity.
Monitoring of any risks associated with this product
is your responsibility.
Market risk
Market risk is the risk that prices including interest
rates will move adversely. As the rate of return that
you receive on your Bank Bill and the term of the
investment are both fixed, you forgo the opportunity
to benefit from any rise in market interest rates during
the term.
You should ensure that you are able to monitor and
value the relevant interest rate movements when
investing in a Bank Bill. The Bank may be dealing
on its own account in interest rate markets and such
dealings may influence interest rates.
affect you, if you seek a repurchase of your Bank Bill
prior to the maturity date.
In the case of a repurchase
In the case of a repurchase of your Bank Bill, the
repurchase price payable to you may be less than
your purchase price due to interest rate movements
and the term you held your investment for. Additionally,
any change in the accepting or endorsing bank’s
prime bank status, that has taken place since the
deal date, could result in a higher repurchase rate
than otherwise would have been offered to you.
For more details, see the section on “Repurchasing
a Bank Bill” in this PID.
These are the most significant risks. However, there
may be other considerations that are relevant to you
should you invest in a Bank Bill. You should obtain
your own independent professional advice to determine
whether the investment is appropriate to your
particular circumstances.
Credit risk
Credit risk is common to all investment products
that you may hold with the Bank. In all cases, you are
reliant on the ability of the respective banks accepting
or endorsing the Bank Bill to meet their obligations
to you for this product. In some cases, the Bank Bill
sold to you may not be accepted or endorsed by the
Commonwealth Bank of Australia, in which case, the
obligation to pay to you the face value at maturity will
lie with that other bank.
Legal Risk
Australia, as a member state of the United Nations,
is obliged to implement United Nations Security
Council sanctions. Australia also may be required to
implement other international sanctions and sometimes
imposes unilateral sanctions. Sanctions can cover
various subject matters including financial restrictions.
Consequently, the Bank may be prohibited from
dealing with certain persons or entities.
This means that if the Bank is aware that you are a
proscribed person or entity, then the Bank may be
required to suspend, cancel or refuse you services or
close or terminate any account, facility, transaction,
arrangement or agreement with you. We may also be
required to freeze assets of yours. You could incur
significant costs as a result of these actions.
Change in prime bank status
If you choose to invest in a Bank Bill, there is a risk
that the status of the accepting or endorsing bank
may change from being a prime bank to a non-prime
bank during the term of the investment. This may
How do I invest in a Bank Bill?
To invest in a Bank Bill, contact your relationship
manager or any branch of the Bank.
Shortly after the deal date, the Bank will send you
a letter to confirm the details of your investment.
Opening a Bank Bill is conditional upon:
n You
providing the Bank with the necessary
identification information it requires; and
nThe
Bank carrying out any necessary verification
check(s).
In opening this account you acknowledge that the
name(s) of any individuals given to the Bank are true
and correct and that the law prohibits the use of false
names, as well as the giving, use or production of
false names and misleading information or documents
in connection with provision of financial services and
the making, possession or use of a false document in
connection with an identification procedure.
How do I set up an account
operating authority?
When you open a Security Investment, you are
required to provide us with the following Account
Operating Authority (‘the Authority’) details:
(i) all signatories who are authorised to operate on the
Bank Bill, and
7
(ii) the method of operation e.g. any one to sign, any
two to sign, the Treasurer plus one to sign etc.
We will act upon this Authority until you vary or cancel
it. If you wish to vary the Authority by changing (i) or (ii)
above, or cancel the Authority, you must give notice in
writing to the Branch where the account is conducted.
Upon receiving such notice, the Authority will be
varied or cancelled. All instructions dated prior to and
presented for payment after the receipt of such notice
in writing, will be honoured for payment.
Any instructions given by you in accordance with the
Authority will be relied on by the Bank. We will not be
liable for any loss or damage you or anyone else suffers
where the Bank acts on those instructions in good faith
and without negligence. This service when supplied
to you as a consumer comes with a non-excludable
warranty under consumer protection laws that it will be
carried out with due care and skill and be reasonably fit
for the purpose. If we breach any of those warranties
you may be entitled to compensation. When you are
not a consumer under consumer protection laws, our
liability for loss or damage is limited to re-supplying the
service to you or paying the costs of having the service
resupplied to you. When you are a consumer under
consumer protection laws, our liability is limited in this
way only to the extent permitted by those laws.
Scope of account operating authority
The signatories who are authorised to operate the
account in accordance with the specified method of
operation, may act on the account and deal with the
Bank in the following manner:
nWithdraw
moneys in any manner;
arrangements with the Bank on all matters
relating to the issue of Encashment Authorities,
Documentary Credits and authorities to negotiate;
nChange the mailing address;
nOpen new account/s with the Bank, provided they
have the same authorised signatories and method of
operation as the Account Operating Authority;
nObtain statements of account and any information
required concerning the account/s generally; and
nEndorse cheques, bills, promissory notes or other
instruments payable to the order of the Account
Holder or if this is a joint account, payable to any
one or more of you and intended for collection,
discount or negotiation and credit of proceeds to
your account/s.
nMake
Severance
If any provision of this PID is found to be illegal, void
or unenforceable for unfairness or any other reason
(for example, if a court or other tribunal or authority
declares it so) the remaining provisions of this PID will
continue to apply to the extent possible as if the void
or unenforceable part had never existed.
8 GENERAL INFORMATION
What are the costs involved in a
Bank Bill?
There are no Bank fees or charges applicable to
this product.
Refer to Appendix A in this PID for more information
on fees and Government taxes.
Are there any tax implications
I should be aware of?
Investing and dealing with investments has tax
and often social security implications. These can
be complex and are invariably particular to your
circumstances. Investment income in the form of
earnings on a Bank Bill is generally taxable income.
You should discuss the timing and derivation of this
income with your independent professional tax adviser.
If you are a non-resident, the Bank is obliged by
law to deduct non-resident withholding tax from the
earnings on your investment.
What if I have a complaint?
Please contact your relationship manager or the
manager of the department that handled the matter
and explain the problem.
Our staff will review the situation and, if possible,
resolve it immediately. If the matter has not been
resolved to your satisfaction, please contact our
Customer Relations team via:
nour
web site at:
commbank.com.au/contactus/comment.asp;
ntelephone
nfacsimile
nwriting
1800 805 605;
1800 028 542; or
to:
Customer Relations
Commonwealth Bank
Reply Paid 41
Sydney NSW 2001
If after giving us the opportunity to resolve
your complaint, you feel we have not resolved it
satisfactorily, you may also lodge a written complaint
with the Financial Ombudsman Service Limited at:
Financial Ombudsman Service Limited
GPO Box 3
Melbourne VIC 3001
Telephone 1300 780 808
Facsimile 03 9613 6399
website www.fos.org.au
Code of Banking Practice
The relevant provisions of the Code of Banking
Practice apply to your Bank Bill if invested in by an
individual, or by a small business customer. The Code
is a voluntary code of conduct which sets standards
of good banking practice for us to follow when
dealing with you.
The Better Banking Book contains useful information on
a range of banking matters. These include the rights and
obligations that arise out of the banker and customer
relationship, account opening procedures, the Bank’s
obligations regarding confidentiality of your information,
complaint handling procedures, bank cheques, the
importance of you informing the Bank promptly when
you are in financial difficulty, and the importance of
you reading the terms and conditions to any banking
service provided to you or in which you are interested.
Copies of the Code of Banking Practice
and The Better Banking Book are available at
commbank.com.au or upon request from your
relationship manager or any branch of the Bank.
Customer information and privacy
Collection and verification of customer
information
“Customer information” is information about a
customer. It includes personal information.The law
requires us to identify our customers. We do this by
collecting and verifying information about you. We
may also collect and verify information about persons
who act on your behalf. The collection and verification
of information helps to protect against identity theft,
money-laundering and other illegal activities.
We use your customer information to manage our
relationship with you, provide you with the products
and services you request and also tell you about the
products and services offered by the Commonwealth
Bank Group (“Group”), affiliated providers and
external providers for whom we act as agent. If you
have given us your electronic contact details, we may
provide marketing information to you electronically.
The collection and verification of customer information
may be carried out in different ways and we will
advise you of the most acceptable methods of doing
this. We may disclose your customer information in
carrying out verification – e.g. we may refer to public
records to verify information and documentation, or
we may verify with an employer that the information
you have given us is accurate.
Depending on whether you are an individual or an
organisation, the information we collect will vary.
For instance, if you are an individual, the type of
information we may collect and verify includes your
full name, date of birth and residential address. If you
are commonly known by 2 or more different names,
you must give us full details of your other name or
names.
For instance, if you are a company, we may
collect and verify information, including company
incorporation and registration details, as well as
details of the company’s officers and its major
shareholders.
If you are acting as a trustee, we may ask you for,
amongst other things, information on the beneficiaries
of the trust and evidence of the existence of the trust.
If you are a partnership, we may require information
including evidence of the fact that the partnership
exists, as well as the full name of the partnership, the
names of the partners and any business name owned
by the partnership.
For other organisations, the kind of information
we collect and verify will depend on the type of
organisation you are.
In addition, during your relationship with us, we may
also ask for and collect further information about you
and about your dealings with us. You must provide
us with accurate and complete information. If you do
not, you may be in breach of the law and also we
may not be able to provide you with products and
services that best suit your needs.
Protecting customer information
We comply with the National Privacy Principles as
incorporated into the Privacy Act 1988 (Cth).
We disclose customer information to other members
of the Group (including overseas members), so
that the Group may have an integrated view of its
customers and to facilitate the integrated treatment
of its customers. It also enables other members of
the Group to provide you with information on their
products and services.
Other disclosures
At common law, banks are permitted to disclose
customer information in the following circumstances:1.1 where disclosure is compelled by law; or
1.2 where there is a duty to the public to disclose; or
1.3 where our interests require disclosure; or
1.4 where disclosure is made with your express or implied consent.
9
So that we can manage our relationships, customer
information may be disclosed to:
n
brokers and agents who refer your business to us;
any person acting on your behalf, including your
financial adviser, solicitor, settlement agent, accountant, executor, administrator, trustee,
guardian or attorney;
Access to your personal information
The law allows you (subject to permitted exceptions)
to access your personal information. You can do this
by contacting:
n
n financial institutions who request information from us if you seek credit from them;
n if you have borrowed from the Bank to purchase property valuers and insurers (so that the Bank can
obtain a valuation of your property, and confirm that
it is insured);
n
if you have insurance: medical practitioners (to verify or clarify, if necessary, any health information you may provide), claims investigators and
reinsurers (so that any claim you make can be
assessed and managed), insurance reference
agencies (where the Bank is considering
whether to accept a proposal of insurance from you and, if so, on what terms); and
n organisations to whom we may outsource certain functions.
In all circumstances where our contractors, agents
and outsourced service providers become aware of
customer information, confidentiality arrangements
apply. Customer information may only be used by our
agents, contractors and outsourced service providers
for our purposes.
We may be required to disclose customer information
by law, e.g. under Court Orders or Statutory Notices
pursuant to taxation or social security laws or under
laws relating to sanctions, anti-money laundering or
counter terrorism financing.
We may send customer information overseas if:
n
that is necessary to complete a transaction, or
n
we outsource certain functions overseas.
We may also be permitted, as distinct from required,
to disclose information in other circumstances. For
more information, please refer to our Privacy Policy.
10 GENERAL INFORMATION
Customer Relations
Commonwealth Bank
Reply Paid 41
Sydney NSW 2001
We may charge you for providing access.
Further information
For further information on our privacy and information
handling practices, please refer to the Group’s
Privacy Policy, which is available at
commbank.com.au or upon request from any
branch of the Bank.
Definitions
“safe custody”
An arrangement where the Bank agrees to hold a
security purchased by you on your behalf.
the “Bank”; “our”; “us”; “we”
Commonwealth Bank of Australia
ABN 48 123 123 124.
“bank accepted bill”
A bill of exchange which has been issued by a drawer
and that is subsequently accepted by a bank. If the
bank accepted bill is subsequently on-sold to an
investor, the accepting bank is obliged to pay the
face value of the bill at maturity to that investor.
“security(ies)”
Either a bank accepted bill or a bank endorsed bill.
“term”
The period from the deal date to the maturity date.
“you”; “your”
The customer who is the person or persons or entity
in whose name the Bank Bill is held.
“bank bill”
A bank accepted bill or a bank endorsed bill.
“bank endorsed bill”
A bill of exchange which has been issued by a drawer
and that is subsequently endorsed by a bank. If the
bank endorsed bill is subsequently on-sold to an
investor, the endorsing bank is obliged to pay the face
value of the bill at maturity to the investor should the
acceptor or the drawer of the bill be unable to do so.
“bill of exchange” or “bill”
A negotiable instrument regulated by the Bills of
Exchange Act 1909 (Cth).
“deal date”
The date on which you enter into a Bank Bill with
the Bank.
“face value”
The amount payable to you on the maturity date of
a Bank Bill.
“maturity date”
The date on which your Bank Bill ends and the face
value becomes available to you.
“purchase price”
The cost of the Bank Bill to the customer.
“repurchase”
Where you wish to redeem all or part of your Bank Bill
prior to the maturity date, you may request the Bank
to buy back from you all or part of the face value of
your Bank Bill.
Definitions 11
APPENDIX A
Fees and Government taxes
Bank fees
There are no transaction or account keeping fees
as the interest rate has been adjusted by a margin
that reflects the costs incurred.
Some related products and services, such as bank
cheques and telegraphic transfers, will incur a
separate fee. These fees will be set out in the PDS,
terms and conditions or fees and charges brochures
for these other products and services.
Government taxes
If you are a non-resident, the Bank is obliged by
law to deduct non-resident withholding tax from the
earnings on your investment.
Your Bank Bill may also be subject to Government
taxes and duties (if any). These may vary from State
to State.
12 APPENDIX A
ADB2760 010910
Commonwealth Bank of Australia
ABN 48 123 123 124